Reliance suspends Kolkata roll-out

Reliance suspends Kolkata roll-out

Kolkata/New Delhi: Reliance Industries Ltd has suspended plans to open Reliance Fresh stores in Kolkata, days before the two stores were to open and a year after it began seeking state government approvals for the agri-retail chain.

“We will open the stores only when we feel there is protection to our people and our property," said Raghu Pillai, president of Reliance Retail Ltd, the retail arm of the Mukesh Ambani-led conglomerate. The two stores were part of a Rs2,000 crore agri-retail plan by Reliance for West Bengal.

The plan included 145 stores, six central processing centres, nine distribution centres and 23 collection centres for fresh produce.

The decision stems from mob attacks on the stores and is the second major setback to Reliance’s ambitious roll-out of retail stores across India.

Last week, the Uttar Pradesh government unexpectedly ordered the closure of Reliance Fresh stores in the state, citing law and order issues and pending a state government study of the impact of organized retail on small traders and wholesalers.

While there has been opposition to organized retail in the past—including an ongoing study ordered by Prime Minister Manmohan Singh at the request of Congress president Sonia Gandhi—Reliance has methodically continued to open stores, at least until now.

In West Bengal, the company has decided to hold back on the roll-out until the situation improves.

Asked if there is a new timetable for the stores to open, Pillai would only say, “We are still evaluating the date."

The troubles come even as Reliance has recently named a new CEO, Avdesh Singh, for its retail operations in West Bengal. He replaces Aloke Malik, who has joined the Aditya Birla group in Bangalore.

On 19 August, 50 activists of the Forward Bloc, which, in fact, is a constituent of the same Left Front that has approved the licences for the stores, attacked a proposed store in the north of the city.

This was followed by another proposed store in the suburbs getting vandalized by members of the state’s opposition party, the Trinamool Congress.

Notwithstanding any innovative government approvals that Reliance has obtained to open the outlets, “We strongly oppose the entry of the Reliance group in West Bengal’s agri-retail market," insists Naren Chatterjee, a member of the Forward Bloc and chairman of the West Bengal Agricultural Marketing Board.

He is openly threatening more mob violence targeted at the company, saying that his party workers will demolish all future Reliance Fresh outlets in the city even as the Forward Bloc works towards reversing the decision to let the chain operate in the state.

Meanwhile, the state machinery is conceding ground. A bureaucrat with the state’s food processing and horticulture department, who did not want to be identified amid the controversy, admitted that it may still be a long haul before Reliance Fresh can roll out in Kolkata.

On 18 August, Mint reported that the West Bengal government is in the process of amending its Agricultural Produce (Marketing) Regulation Act, which will allow organized retailers in the private sector to directly procure and sell farm produce from the farmers.

The state’s food processing and horticulture department and the land and land reforms department have also cleared Reliance’s plans for setting up six distribution centres across the state, each involving 100 acres of land.

This, in effect, has skirted the resistance being put up by the state agricultural marketing department, run by members of the Forward Bloc, who were opposing the grant of licences to Reliance to procure and sell agricultural produce in the state.

The clearances given by the two departments—run by members of the Communist Party of India (Marxist), the majority constituent of the Left Front government—haven’t gone down well with the Forward Bloc’s Chatterjee.